By Ryan Davis
 
   Of DOW JONES NEWSWIRES
 
 
   CHICAGO (Dow Jones)--Chicago Board of Trade corn futures settled sharply
 lower on continuing fund liquidation and a "non-threatening" weather outlook,
 traders and analysts said.
 
   September corn closed down 22 1/2 cents to $5.65 per bushel, December corn
 closed down 22 1/2 cents to $5.85, and March corn closed down 22 1/2 cents to
 $6.05.
 
   Fund liquidation, which drove prices substantially lower in late trading
 Thursday, continued to pressure prices for the duration of Friday's session.
 
   There continues to be "a lot of speculators getting out of the market," said
 Sid Love, analyst with Kropf and Love consulting.
 
   The market also continues to look beyond the above-average temperatures
 expected throughout the U.S. corn belt this weekend to an expected mid-week
 cooldown starting around Tuesday.
 
   "After a couple of days we're going to turn this (heat) around and see
 another frontal system come, provide some moisture, and cool things off again,"
 said Dale Durchholz, analyst for AgriViser. "And then, overall, you're sitting
 here looking to August going 'there is no weather problem.'"
 
   The prospect of plentiful rain next week across portions of the corn belt is
 further pressuring the market, traders and analysts said.
 
   "So, you've got this attitude that is pretty pervasive in the trade right now
 that we're going to have a reasonably good corn crop," said Durchholz.
 
   There are "a lot of people" now projecting average yields at 152 bushels per
 acre or higher, he said. The U.S. Department of Agriculture is currently
 predicting an average yield of 148.4 bushels per acre. New yield projections
 will be released in a USDA Aug. 12 crop production report. That report is seen
 as the first concrete indication of the effects of June flooding throughout the
 U.S. Midwest.
 
   Outside markets also inflated losses, traders and analysts said. Although the
 price of crude oil started off stronger earlier in the day, its downward tick
 later on pressured corn prices.
 
   "It just pulled the plug on the grains market," said Durchholz.
 
   The dollar also remained strong throughout the day, providing further
 pressure, traders said.
 
   JP Morgan purchased 2,500 December contracts late in the trading session.
 
   CBOT oats futures ended lower, at their lowest prices since March. September
 oats were down 9 1/2 cents to $3.68 per bushel, December oats were down 9 1/2
 cents to $3.87 1/2 and March oats were down 9 1/2 cents to $4.07. The September
 contract fell and closed below its 200-day moving average for the first time.
 
   Ethanol futures ended lower. September ethanol was down $0.063 to $2.383 per
 gallon and December ethanol was down $0.031 to $2.399.